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Debt Recovery Methods & Enforcements in Nigeria


We offer debt recovery methods and enforcement procedures in Nigeria to guide our ardent readers without any obligation. We will ned to take a few definitions to continue this discussion. Debt collection is the process of pursuing payments of debts owed by individuals or businesses. An organization that specializes in debt collection is known as a collection agency or debt collector.[1] Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed according to

Methods of Debts Recovery

Due the large debts that some commercial entities like banks, insurance companies and other mercantile bodies are owing, various methods of debt recovery has emanated; both conventional and unconventional.

However, for the post of this article, conventional methods of debt recovery will be laid more emphasis on than unconventional method.

Some of the methods used in recovery debt will be explained below and they are:-

  • Publication of the names of debtors in Newspaper as a means of threating them

This method has been used by so many companies to recover their debt. However, this method has its merits and the major merit it has is that debtors won’t want their name (reputation) to be spoilt. So they tends to pay as soon as their name has been publish to the public to see.

  • Using Debt Collectors:- This method has overtime prove to be more effective due to its nature. Although, it is unconventional. Also, so many commercial entities has adopted this method recently and it has been working for them. For instance, the debt collectors can go and meet the debtor physically and ask him to pay the debt or even serve him letter face to face. And, if he fail to pay, they might apply physical combat to enforce him to pay.

However, applying this force methods might lead the debt collector been liable to Tort.  They will be liable to Tort, if thugs are employed to harass the debtors in order to force him or her to pay. And this might spoil the good name of the creditors. This serve as the major disadvantage of this method.

  • Debtors Detention:- In this situation, the debtors will be arrested and put in detention until when he or she is able to raise the money to pay the debt. Assuming it is a company, the owner of the company will be the one to be arrested and he or she will only be released when the debt has been settled. However, this methods has been frown up by the democratic nature of this country (Nigeria). This methods did not follow the common law principles that states limited liability companies is a legal entity, which is separate and distinct from its proprietors. Because, even if the creditor hired a police to arrest the debtor; the police are not empowered by the law to recover debt. Therefore, this methods cannot stand the test of time.
  • Realization of Security:- Most banks or entities ensure that there are proper perfection before they can lend out money or allow someone to owe them. They will make sure that the intending debtor stands with something as a security for the debt; so, in case when he failed to pay the debt, the security (mortgage property) will be sold. However, there are situation whereby debtors tends to file frivolous actions and obtain injunctions which would prevent the bank (creditor) from selling their collateral security or for probably postponing evil day.

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However, this methods has proved hard in some communities, especially in the rural and semi urban areas. Because, it will be difficult to see who will buy those securities and also because of the feelings and beliefs of people that the security might have been possessed with dangerous voodoo by the debtors.

  • Debt Recovery through use of Legal Practitioners and Court process

This method tends to be employ when creditors has use every other methods and it appears that, they are not working out. However, most companies do complained that this methods tends to waste time and laborious in nature; that most times, defaulting debtors delay settlement of their debt or may totally avoid to pay the debt.

Moreover, debt recovery through law court is the Conventional process because it involves the utilization legal practitioners.

The procedures involves the legal practitioners writing letter of demand and the legal practitioner will also visit the debtor. And during the visit he will assess the debtor and his business premises in or to know if the debtor is in a good position to settle the debt owed.

However, under the new Lagos Civil Procedure Rules 2012, there must be evidence of attempt to settle a matter out of court for court process to be accepted by the Registrar. It also further states that, the claimant must file form 01, Statement of Compliance with pre action protocol as provided for in order 3 Rule 2 (1) (e).

Here, it was also advised that special courts should be set up to dispose off debt recovery cases because of the adverse effect of huge debts owed commercial concerns on the socio-economic and political life of the nation.

Furthermore, there is a method classify under debt recovery through legal proceedings which is called Management of Cases on Fast Track. According the new rule newly made by Lagos State in relation to civil procedure in high court. Where it states that, debt recovery matters must be concluded within a short time within, lets say, within nine months. This can be seen in Order 56 High Court of Lagos State Civil Procedure Rules 2012.



Basically, procedures for summary judgment under Order 11 Rule 1 High court of Lagos State Civil procedure Rules 2012 make the provision that “where a claimant believes that there is no defence to his claim, he shall file with his originating process the statement of claim, the exhibits, the deposition of his witnesses and an application for summary judgment which application shall be supported by an affidavit stating the grounds of his belief and a written brief in respective thereof.

The rule stated above, deals with the procedure for obtaining summary judgment. However, a claimant who desires to obtain summary judgment pursuant to Order 11 of 2004 rules which is similar to Order 11 of the 2012 rules, should applies that judgment be entered summarily  in his favour and for that purpose, he supports his application with a verifying affidavit stating his belief.

Admission of Debt (Accepting that the debt is owed)

This is a situation whereby a debtor or his counsel admitted to the debt, either through pleading or letters can obtain judgment summarily upon admission of facts before or during the trial of the suit. This summary of judgement is likewise obtainable upon oral admission in court by a counsel.

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However, the plaintiff (creditor) must call witness or tender documentary evidence before obtaining judgment upon admission of facts by the defendant.

Lastly, the essence of an admission is to save time of two parties and showing the sign that the claim is correct and true. Because, once there is an admission, then there is no score to settle in court. The next thing is the debtor to talk about the debt is going to be settled.

Admission of facts maybe implied or expressed and this must be clearly stated

 Admitting and Judgment Entering

This arise in a situation whereby, any person against whom a charge has been entered may after the summons has been served on him, now file a written statement that he signed himself admitting in whole or in part the claim in respect of which such charge has been entered; and it shall be the duty of the registrar of the court in which the charge was entered to send a notice to the debtor by post or by delivering it to the debtor address residence or business place.

However, this rule appears silent as to what happens when the parties argue on the claim. In this case, the parties would be permitted to file their pleadings and that the situation should proceed to trial.


The import of the Proviso in section 251 (1) (d) of the Federal Republic of Nigeria, 199 Constitution justifies that both federal high court and the State High court have the power to settle disputes between an individual customer and his bank. That is, both Federal High court and the State High Court have the concurrent jurisdiction over Banker/Customer Relationship issues and transaction between a bank and individual customer.


This situation arise where a debtor does not argue the debt but does not have the means of settling the debt he needs not bring an application to set aside a default judgment.

In this case, he will bring an application to be paying the debt instamentally. However, the period of settlement of the judgement debt must however be reasonable.

More so, in application for instalmental payment, a court of law must be involve in the delicating of balancing of two opposing interests in its search for a convenient amount payable by the judgment debtor to the judgment creditor.

Lastly, when applying for installmental payment of a judgment debt, the burden is always on the judgment debtor to satisfy the court that placing his liabilities and obligations against his income and all his assets, he deserves to be granted some equitable terms of settling the indebtedness and because of this, his affidavit must present detailed facts with every candor and sincerity.


Basically, the purpose for the undefended list procedure is to remove needless wastage of time in trying a direct matter of debt or similar claim. This procedure is designed to remove the technicalities of pleadings attendant on a normal hearing in the High court.

More so, the court rules provides the cases to be placed on undefended list procedure which is deliberately designed to permit fast dispensation of justice in order avoid pointless congestion of the legal system with proceedings which would have be easily and fastly disposed of.

The list is premeditated to secure fast justice and avoid the injustice which is likely to occur when there is no genuine defence on the merits to the plaintiff’s case.

Judgment under the undefended list procedure

In a situation where there is no defence to the plaintiff’s action, the court should enter judgement.

However, a judgement obtained under the the defended list procedure is one of the advantages, which can be set aside on appeal or by another action in the case of fraud.

Finally, when a case entered on the undefended list comes to the court on the return date, the court has the duty to make sure that the debtor (defendant) has filed a notice of intention to defend and an affidavit of defence.


It is a formal document addressed to the defendant requiring him to appear before the court if he/she wishes to defend himself against the plaintiff’s claim. A writ is usually accompanied by an Endorsement of the Claim or a Statement of Claim so that the defendant is made aware of the claim against him/her.


A Criminal Petition can also be filed against the Debtor where cheques issued by them failed to be honoured by their banks or it is a clear case of fraud or diversion of proceeds of loans or goods sold. Such petition can be used to compel the debtor to quickly settle the claim.


It is a known fact that any judgment gotten in a court will be unproductive without the means of enforcing the judgment.

Therefore, the  major ways of executing a judgment in relation to debt recovery are:-

  • Writ of Fifa
  • Attachment and Sale of Immovable Property
  • Writ against goods and chattel
  • Writ of Sequestration
  • Garnishee Proceedings
  • Bankruptcy Petition
  • Winding Up Proceedings


This is also known as Writ of Fieri Facias and it is the most popular form of enforcement of payment of judgment debts.

However, the effect of this writ is the attachment and sale of the judgment debtor’s property to realize the judgment debt. Furthermore, in a situation where a court has made an order for payment of the judgment debt by installments, then the order operates as a stay of execution of the judgment and afterward the writ may be issued only for the amount of installments which have become due on such default.

The Effect of Writ of Fifa

This execution of judgment bind the property in the hands of the execution debtor, starting from the time when the writ is delivered to the sheriffs to be executed and that for the better expression of such time, when it will be the duty of the security without fee, as at the time of receiving such writ and to endorse on the back of the writ the hour, day, month and year when he received the writ.

Writ of Fifa is issued on an application of the judgment creditor or his lawyer by filing of a praecipe in the prescribed form and this will be accurately completed and all the feeds will be paid.

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This is the duty of the Sheriff, who has the deputy sheriff and the Bailiffs to support him. It is the Legal officer that carry out the seizing and sale of the goods. However, the Legal officer are agent of the Sheriff and not the execution creditor. And finally, the registrar will forwards the writ to the Sheriff or Deputy Sheriff of the area where the execution is to take place.


In this case, the sale of the debtor’s properties will be by public auction except where on application, the court orders selling of the goods privately. However, private selling without leave of court but with the agreement o the debtor remains legit unless on application the court can set it aside. More so, no goods seized in execution under process of a court must be sold because of satisfying the writ of execution until the expiration of a period of at least five days after the goods have been seized except the goods are perishable in nature or the owner of the goods that is been seized make such requests in writing.


Writ of sequestration is directed against the property of the judgment debtor in relation to both movable and immovable property.  It result in vesting all the property into the possession of the sheriff and this prevent the debtor from making use of the property. And if the property are merchandise, it cannot be sold and if it is housing property, the debtor cannot enter them or receive any rents or profit due to him on the property.

However, order 11 of 9 judgment Enforcement make a provision that “a writ of sequestration shall be directed to two or more commissioners to be appointed by the court because of this, and they shall be commanded and given authority to enter upon all the immovable property of the person against which the writ has been issued.

 The Effect of Writ of Sequestration

This writ binds real property and personal property in possession from the time it is been issued. Furthermore, where sequestration of a contemnors’ assets has been ordered, whoever knowingly takes any action that tends to prevent the sequestrator from carrying out their duty will be seen as obstructing a court order and therefore technically in disrespect of court.


This is a mode of execution in which a debt that is due to the judgment debtor from another person is attached by the judgment creditor in order to satisfy the judgment debt and costs.

Furthermore, this is a useful attachment of the debtor’s effects in the garnishee’s hands and is a form of execution of a judgment which is given by court against the debtor. More so, the parties to the garnishee proceedings are:- Judgment debtor, Judgment creditor and debtor to the judgment debtor.


This is a statutory process of dissolution of a company. It is a process whereby the operations of a company are brought to an end and its assets are sold and the proceeds will be distributed to those whom the company are owing.

The circumstances that might lead to winding up of a company by law court according to CAMA 2004 are:-

  • When the company has by special resolution agree that the company should be wound up by the court.
  • The number of the company members is reduced below two
  • The company is not able to deliver their statutory report or hold statutory meetings
  • And lastly, when the company is not able to pay the debts they are owing

However, you need to note that, Winding up is used for Company while Bankruptcy is used for individual that is not able to pay its debt


According to Bankruptcy Act Cap B2 LFN 2004 which provides that a debtor is said to be bankrupt when:-

  • The creditor has obtained a final judgment or final order against him for owing an amount of money and he is not able even after he has been served 14 days court notice.
  • The execution against him has been levied by seizure of his goods under process in an action or proceedings in the court and the goods have either been sold or held by lawyer     for 21 days.
  • He files in the court a declaration of his inability to pay the debts he was owing or he presents bankruptcy petition against himself.

Bankruptcy Petition

What to first of all consider on the presentation of a bankruptcy petition is to preserve the debtor’s property and assets for the benefit of his creditors by making sure that he is prevented from disposing the properties or dealing with them in another manner which will affect the interest of the creditors.


Basically, foreign judgments may in certain cases be recognized and enforced in Nigeria and judgment in Nigeria can also be enforced in other countries too.

The act that make provision for the enforcement of foreign judgment in Nigeria is the Foreign Judgment (Reciprocal Enforcement) Act Cap. F35 LFN 2004.

Therefore, under this act a judgment which is obtained in a superior court of any foreign country and satisfy the requirements of Section 3 (1) of the act shall be enforced in Nigeria, according to Reciprocal Enforcement of Judgment Act 2004.

This act also provides for registration of judgment of superior courts of foreign countries which gives reciprocal treatment to judgments of Nigeria High Courts and to which the provision of the Act has been extended.

Lastly, sSection 9 (2) Administration Act 1920 specifies certain limits on the judgment to be registered. And this make provision that no judgment could be registered if:-

  • The original court acted without jurisdiction
  • The judgment was obtained by fraud
  • The judgment was in respect of a course of action, which for reasons of public policy or some other similar rule could not have been accepted by the registering court etc.

Note that, based on enforcement of foreign judgment, what is obtainable in England is also obtainable in Nigeria too.

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Garnishee’s liability is either on indebtedness to the debtor or the possession of personal property of the debtor which is capable of being seized and sold under execution.


Lately, there has been many litigation in the area of debt recovery and even though the court rules make provision for summary judgment, it has been discovered that the court rules are not enough sometimes to protect the interest of creditors, or are not subject to favorable judicial pronouncement, as debtors are believed to be favored by some judges.

There are different types of injunctions and they are:-

  • Mareva Injunction
  • Anton Pillar Injunction
  • Exparte Interim Injuction
  • Interlocutory Injunction
  • Perpetual Injunction

Mareva Injunction:- Under this injunction, the creditor could seize the property of his debtor before the judgment was delivered against the debtor and then retain the property as security for payment of the debt  when he finally wins the case. However, to remove the fears on the part of the creditor that maybe the debtor might dispose the properties prior to the judgment date, Mareva Injunction was introduced.

Finally, the purpose of this injunction is to prevent the injustice of a defendant from taking away his assets which might be used in satisfying a judgment from the jurisdiction

However, the limitation of Mareva injuction are:-

  • It is not granted to enhance the position of the creditor as against other creditors by giving him priority on the assets of the debtors.
  • It permit all drawings relating to the debtor’s reasonable living expenses not more than a specific sum
  • It does not spread to assets outside jurisdiction.

The Anton Piller order is an order of court, made ex-parte and requiring a defendant or respondent to allow certain persons to enter his premises to search for documents and movable articles as are specified in the court order, and to permit such documents or articles to be taken away.  It is seen as an Order of the Court that gives right to search premises ans seize evidences without prior warnings. It is  also called search orders.

An interlocutory injunction is a court order to compel or prevent a party from doing certain acts pending the final determination of the case. It is an order made at an interim stage during the trial, and is usually issued to maintain the status quo until judgment can be made”

A Perpetual Injunction is one ordered by the Courts to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent multiplicity of judicial cases. Ordinarily it should be issued when the lawsuit underlying activity is resolved.

We work with a team of Commercial Lawyers who support us when we need to deploy litigation to recover past due debt for you. You can reach us on 08023200801, Email: for further conversation and how we can help you with your peculiar issue with unpaid debt. Our customer enquiry form is placed hereunder for your completion

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